Credit access opened to borrowersReal Estate Report
In its recent news release, mortgage financing giant Freddie Mac announced that it has expanded access to credit for American families without credit scores. Beginning in June, borrowers without credit scores may be able to easily qualify for purchase mortgages or no-cash-out refinance transactions. Still, borrowers will have to show payment references, like records showing timely housing payments.
Freddie Mac currently allows lenders to manually underwrite mortgage loans to borrowers without credit scores. Now, Freddie Mac will allow automated assessments of such borrowers, which it says will help lenders serve more potential buyers efficiently. By allowing automated assessments, lenders can serve more potential homebuyers more efficiently and with greater certainty that the loan will be purchased by Freddie Mac.
“We’re committed to supporting responsible lending and improving access to credit for all borrowers, including first-time home buyers, low- and moderate-income buyers, and underserved populations,” says David Lowman, executive vice president of Freddie Mac’s Single-Family Business. “It’s important that we keep pace with the evolving needs of the U.S. market and help support sustainable homeownership.”
Loans will be reviewed by Loan Product Advisor®, which evaluates them based on Freddie Mac’s credit requirements and provides feedback on the credit risk of each loan. It’s the cornerstone of Loan Advisor Suite®, Freddie Mac’s smart end-to-end technology solution that gives customers certainty, usability, reliability and efficiency.
“By allowing lenders to more easily assess their overall underwriting risk, we encourage them to take advantage of our entire credit box to originate more loans in a safe and secure manner,” Lowman noted.
Lauren Bunting is a licensed Associate Broker with Bunting Realty, Inc. in Berlin, MD.